An Environmentally Conscious Robust Optimization Approach for Planning Power Generating Systems

Carbon dioxide is a main greenhouse gas that is responsible for global warming and climate change. The reduction in greenhouse gas emission is required to comply with the Kyoto Protocol. Looking at CO2 emissions distribution in Canada, the electricity and heat generation sub-sectors are among the largest sources of CO2 emissions. In this study, the focus is to reduce CO2 emissions from electricity generation through capacity expansion planning for utility companies. In order to reduce emissions, different mitigation options are considered including structural changes and non structural changes. A drawback of existing capacity planning models is that they do not consider uncertainties in parameters such as demand and fuel prices.
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\nStochastic planning of power production overcomes the drawback of deterministic models by accounting for uncertainties in the parameters. Such planning accounts for demand uncertainties by using scenario sets and probability distributions. However, in past literature different scenarios were developed by either assigning arbitrary values or by assuming certain percentages above or below a deterministic demand. Using forecasting techniques, reliable demand data can be obtained and can be inputted to the scenario set. The first part of this thesis focuses on long term forecasting of electricity demand using autoregressive, simple linear, and multiple linear regression models. The resulting models using different forecasting techniques are compared through a number of statistical measures and the most accurate model was selected. Using Ontario electricity demand as a case study, the annual energy, peak load, and base load demand were forecasted, up to year 2025. In order to generate different scenarios, different ranges in economic, demographic and climatic variables were used. 
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\nThe second part of this thesis proposes a robust optimization capacity expansion planning model that yields a less sensitive solution due to the variation in the above parameters. By adjusting the penalty parameters, the model can accommodate the decision maker’s risk aversion and yield a solution based upon it. The proposed model is then applied to Ontario Power Generation, the largest power utility company in Ontario, Canada. Using forecasted data for the year 2025 with a 40% CO2 reduction from the 2005 levels, the model suggested to close most of the coal power plants and to build new natural gas combined cycle turbines and nuclear power plants to meet the demand and CO2 constraints. The model robustness was illustrated on a case study and, as expected, the model was found to be less sensitive than the deterministic model.

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